Flipping Cars for Fun and Profit

                                                           

The word of the day was "moderated." The Consumer Price Index came in at one of the highest levels in 20 years but because it was largely in line with elevated expectations and below   View in browser   August 11, 2021   Today's Top Stories From the Breitbart News Desk The word of the day was "moderated." The Consumer Price Index came in at one of the highest levels in 20 years, but because it was largely in line with elevated expectations and below the jaw-dropping inflation seen a month earlier, the established financial media instructed the public that inflation had "moderated." It might be better to think of inflation as having broadened into a more sustainable shape than the very spiky levels seen in the May and June reports. Recall that used car prices jumped 10 percent in June after rising 7.3 percent in May. That sort of thing cannot go on forever. At some level, consumers will balk at paying higher prices. With used cars, the price cap is probably somewhere below the price of a new car. Otherwise, you could do a good business buying new cars, holding them for a few months, and then upselling them as used cars—a process one internet wit termed carbitrage. The Cleveland Fed's measures of median and trimmed-mean inflation, which exclude the prices that make extreme moves, showed year over year inflation was higher in July than June. That is an indication that price inflation is broadening out from the items with the most price flexibility to those with less flexibility. Reluctant price hikers—such as low-margin big box stores—have started to pass on price hikes. And judging from recent commentary on earnings calls, they are likely to keep doing so. There are also troubling signs that inflation may be being slowed not because supply is rising but because demand is falling. A quick look at TSA travel stats show that airport check-throughs have stagnated or even fallen. CPI data showed that rental cars and airline tickets are less expensive. Bank of America economists Michelle Meyer and Stephen Juneau pointed out in a note Wednesday that seated diners on the OpenTable network were down 9.4 percent from 2019, a 3 percentage point decline from the previous week. The likely cause: fear of the Delta Variant. "The weekly decline was led by a 4.8 percentage point drop in the virus-stricken South," Meyer and Juneau write. Perhaps the most positive development on the inflation front is that there is less denial. When we started warning about inflation months ago, many economists were still in a trance of complacency bred from a decade and a half of low inflation. As a result, actual inflation kept coming in higher than forecasts. Now the forecasts have come into line with reality. – Alex Marlow & John Carney Breitbart News Network     TOP STORY   Carney: Transitory Inflation Is Fading, Sticky Inflation Is Growing The great used car inflation of 2021 has slowed down, but inflation is still rising in less volatile categories of consumer goods and services, data from the Bureau of Labor Statistics showed Wednesday. The Biden administration and Fed chair Jerome Powell last month argued that a lot of the much higher than expected inflation was due to a few items that had seen extremely rapid price increases. Used cars, which rose 7.3 percent in May and 10 percent in June, were the favorite example. This formed a key part of the argument that inflation would prove "transitory," meaning it would diminish after a few months and not lead to a sustained acceleration in price hikes. (Note that they weren't arguing prices would come down — although those used car prices probably will fall, most prices will get stuck at permanently higher levels — just that prices would not keep rising at an accelerated pace.) [Click here for more]   IN OTHER STORIES... Anchors Aweigh! Inflation Expectations Sail into Uncharted Waters Inflation expectations of businesses jumped higher in August, according to a survey released by the Atlanta Fed Wednesday, casting doubt on the notion that inflation is moderating. Businesses surveyed by the Atlanta Fed indicated that on average they expect inflation to be three percent over the year ahead, up from... [Click here for more]   Bidenflation Stays High with Prices Jumping 5.4% Consumer prices surged higher in July. The Consumer Price Index rose 5.4 percent compared with a year ago, the Department of Labor said Thursday. On a monthly basis, the CPI rose 0.5 percent. Economists had expected the inflation measure to rise by 5.5 percent on an annual basis and 0.5 percent compared with... [Click here for more]   McCarthy Slams Socialist Reconciliation Package: 'Democrats' $3.5 Trillion Spending Binge' House Minority Leader Kevin McCarthy (R-CA) torched the Democrats' attempt at a socialist reconciliation package to accompany the so-called infrastructure deal, calling it the "Democrats' $3.5 Trillion Spending Binge," and said House Republicans "firmly oppose" any type of plan. "Democrats want to crush hard-working Americans and their families," McCarthy wrote in his statement, pointing out in the rest of his statement that Democrats do not care about inflation hurting... [Click here for more] FOLLOW   Did you receive this email from a friend? Sign up to receive Breitbart Business Digest.

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